Bank and financial services employees can be subject to three federal screening regimes that stack on top of each other. Section 19 of the Federal Deposit Insurance Act restricts FDIC-insured institutions from employing people with certain criminal convictions or pretrial diversion agreements without the FDIC’s consent. The SAFE Act requires fingerprinting and an FBI criminal history check for state-licensed mortgage loan originators. FINRA requires fingerprinting for registered representatives at broker-dealers. None of these rules replace the standard FCRA steps, authorization, disclosure, and adverse action, that apply whenever an employer orders a report through a consumer reporting agency.
This guide covers what each regime requires, what changed under the Fair Hiring in Banking Act, and how banking-specific screening and FCRA compliance work together.
What Section 19 of the FDI Act Restricts
Section 19, codified at 12 U.S.C. 1829, provides that except with the prior written consent of the FDIC, a person convicted of a criminal offense involving dishonesty, breach of trust, or money laundering, or who has agreed to enter a pretrial diversion or similar program in connection with a prosecution for such an offense, may not become or continue as an institution-affiliated party of an insured depository institution, own or control an insured depository institution, or otherwise participate in the affairs of one. An insured institution is separately barred from permitting that participation. Violations can carry civil and criminal penalties (12 U.S.C. 1829; FDIC, Section 19 overview).
In practice, FDIC-supervised institutions commonly extend a conditional offer while a background check is completed, then confirm the applicant is not barred under Section 19 before the person begins work in a covered role. This is a distinct statutory gate, separate from the individualized review an employer applies to a consumer report from a screening company.
How the Fair Hiring in Banking Act Narrowed Section 19
The Fair Hiring in Banking Act was enacted in December 2022 and directed the FDIC to narrow what counts as a disqualifying offense under Section 19. The FDIC’s final rule implementing that directive took effect October 1, 2024. According to the FDIC, the rule expanded the category of “de minimis” offenses that are excluded from Section 19’s prior consent requirement, including raising the threshold for certain low-level offenses and increasing the aggregate face value covered under the insufficient funds check exception. It also added a category of “designated lesser offenses,” such as use of a fake identification, shoplifting, trespassing, fare evasion, and driving with an expired license or tag, that are excluded once a year or more has passed since the conviction or program entry, and it addressed how expunged, sealed, or dismissed records and offenses committed outside the United States are treated (FDIC, Section 19 overview).
The effect is that fewer minor, older, or resolved offenses require an individual application to the FDIC than before the rule took effect. It does not eliminate Section 19, and it does not change the consent requirement for offenses that remain covered. Whether a specific conviction requires an application is fact-specific, and institutions typically work through it with regulatory counsel.
SAFE Act Screening for Mortgage Loan Originators
Mortgage loan originators are screened under a separate framework. The SAFE Mortgage Licensing Act, at 12 U.S.C. 5104, sets minimum standards for state licensing of loan originators and requires applicants to furnish fingerprints for submission to the FBI and to any government agency authorized to receive that information, for a state and national criminal history background check (12 U.S.C. 5104). Licensing runs through the Nationwide Multistate Licensing System (NMLS), operated by the Conference of State Bank Supervisors. Prospective loan originators authorize state regulators to review the FBI criminal history results, along with a credit report, through NMLS (CSBS, Protecting Homebuyers with NMLS and Consumer Access).
Employers, and the public, can also use NMLS Consumer Access to confirm that a mortgage loan originator holds a current registration or license and to see the states where that person is authorized to do business (CSBS). That lookup is a licensing status check, not a substitute for a screening company’s financial background check or criminal background check ordered under the FCRA.
FINRA Fingerprinting for Registered Representatives
Broker-dealer employees registered with FINRA are screened under yet another rule. Section 17(f)(2) of the Securities Exchange Act of 1934 and Exchange Rule 17f-2 require firms to submit fingerprints for partners, directors, officers, and employees, with a narrow exemption for people who do not sell securities, do not handle securities or funds, and do not supervise anyone who does. When a firm files a Form U4 to register an individual, it has 30 days to submit fingerprints; if it misses that window, the registration is set to “Inactive Prints” and the person cannot conduct business in that status until fingerprints are processed. FINRA forwards fingerprints to the FBI for processing (FINRA, Submit Fingerprints; FINRA, Fingerprint FAQ). A fingerprint background check ordered from a screening company is a separate service from the FBI submission FINRA requires through its own fingerprint program, and employers should not assume one satisfies the other without confirming with their compliance team.
Banking-Specific Screening Does Not Replace FCRA Compliance
Section 19, the SAFE Act, and FINRA fingerprinting each address whether someone can be employed in a particular banking role at all. None of them stand in for the FCRA obligations that apply the moment an employer orders a consumer report from a background screening company like Reveal: a clear and conspicuous standalone disclosure, the applicant’s written authorization, and, if the employer may not move forward based in whole or in part on the report, the adverse action process, a pre-adverse action notice, a copy of the report, a copy of the Summary of Rights, a reasonable waiting period, and a final adverse action notice.
The report itself is information that supports a human decision. It is not a verdict, and reviewing it is an individualized process, not an automatic disqualification, even in banking roles where a separate statute like Section 19 also applies to the underlying conviction. A bank’s employment background check program typically has to satisfy the FCRA framework for every hire, while layering in Section 19, SAFE Act, or FINRA screening for the roles those rules cover. Reveal’s pricing page outlines how these services are packaged for financial services employers. See the FCRA adverse action process guide for the step-by-step sequence, and what is a financial background check for how these reports are put together.
Comparison: Role Type, Governing Requirement, and Source
| Role type | Governing requirement | Verified primary source |
|---|---|---|
| Bank teller or general employee at an FDIC-insured institution | Section 19 of the FDI Act (12 U.S.C. 1829): restricts employment after certain convictions involving dishonesty, breach of trust, or money laundering, or pretrial diversion, absent FDIC consent or a de minimis exception under the Fair Hiring in Banking Act | law.cornell.edu/uscode/text/12/1829; fdic.gov/bank-examinations/section-19 |
| Mortgage loan originator | SAFE Act (12 U.S.C. 5104): fingerprinting and an FBI criminal history background check are a minimum standard for state licensing through NMLS | law.cornell.edu/uscode/text/12/5104; csbs.org, NMLS Consumer Access |
| Registered representative at a broker-dealer | Section 17(f)(2) of the Securities Exchange Act and Exchange Rule 17f-2: firm must submit fingerprints tied to Form U4 registration, processed by the FBI | finra.org, Submit Fingerprints |
Every row sits alongside, not instead of, the FCRA process when a bank or financial services employer uses a consumer reporting agency to run the check.
Frequently Asked Questions
Do all bank employees need an FBI fingerprint background check?
Not automatically. Section 19 of the FDI Act restricts employment for certain convictions but does not by itself require FBI fingerprinting for every role. Fingerprinting tied to an FBI criminal history check is specifically required for mortgage loan originators under the SAFE Act and for registered representatives under FINRA’s fingerprint rules. Individual banks may also require fingerprint-based checks more broadly as part of their own hiring policies.
What convictions can bar someone from working at an FDIC-insured bank under Section 19?
Section 19 covers convictions for criminal offenses involving dishonesty, breach of trust, or money laundering, and agreements to enter pretrial diversion or similar programs for those offenses, unless the FDIC has given prior written consent or the offense falls within a de minimis exception. The FDIC’s Section 19 overview page describes how the current exceptions are structured.
Did the Fair Hiring in Banking Act change who can work at a bank?
The Fair Hiring in Banking Act directed the FDIC to narrow the offenses that trigger Section 19’s prior consent requirement. The FDIC’s final rule, effective October 1, 2024, expanded the de minimis exceptions and added a category of designated lesser offenses that are excluded once enough time has passed. It did not repeal Section 19 or eliminate the consent requirement for offenses that remain covered.
Do mortgage loan originators need a separate background check from other bank employees?
Mortgage loan originators go through fingerprinting and an FBI criminal history check as part of state licensing under the SAFE Act, administered through NMLS. That licensing screen is separate from, and does not replace, any FCRA-governed background check a lender orders through a consumer reporting agency, or Section 19 review for the underlying institution.
Does a bank still need FCRA authorization and disclosure if it already runs a Section 19 or SAFE Act check?
Yes. Section 19, the SAFE Act, and FINRA fingerprinting are separate regulatory regimes tied to specific roles. Whenever an employer orders a consumer report from a background screening company, standard FCRA steps apply: a clear and conspicuous disclosure, the applicant’s written authorization, and, if the employer may take adverse action based on the report, the pre-adverse action notice, a copy of the report, the Summary of Rights, a reasonable waiting period, and a final adverse action notice.
Where can I verify a mortgage loan originator’s license and background status?
NMLS Consumer Access, operated in connection with the Conference of State Bank Supervisors, lets the public confirm whether a mortgage loan originator holds a current registration or license and in which states. It reflects licensing status rather than the results of a specific employer’s background check.
General Information, Not Legal Advice
This article is general information about publicly available banking, securities, and consumer reporting rules. It is not legal advice, and it does not cover every state licensing variation, institution-specific policy, or fact pattern that can affect how these rules apply. Requirements change over time and can vary by jurisdiction and by regulator. Banks, mortgage lenders, and broker-dealers should confirm current obligations, including how Section 19, the SAFE Act, FINRA rules, and the FCRA apply to a specific role or applicant, with their own counsel and compliance team.
